Palantir: Betting on a Drop Below $23 with Put Options
In recent weeks, Palantir Technologies (PLTR) has shown significant growth, reaching a key resistance level at $25. However, despite attempts to breach this level, the price failed to sustain above it, indicating potential buyer exhaustion and the possibility of a correction beginning.
Trading volume analysis confirms the lack of strong buyer pressure at current levels, making a pullback scenario likely. The key support level is at $23, and breaking below it could accelerate the price decline.
Considering the expected correction, I am looking at a strategy using bearish put options with a weekly expiration. This will limit potential losses while offering the opportunity to profit from a decline in shares below $23.
The strategy involves selecting options with a potential profit-to-risk ratio of 1 to 1.88, which is attractive from a capital and risk management perspective.
In conclusion, key factors to monitor will be the price dynamics relative to the $25 level and changes in trading volumes. Any signs of weakening buyer interest could serve as confirmation of the beginning of the correction and a signal to enter a bearish position through put options.
Trading volume analysis confirms the lack of strong buyer pressure at current levels, making a pullback scenario likely. The key support level is at $23, and breaking below it could accelerate the price decline.
Considering the expected correction, I am looking at a strategy using bearish put options with a weekly expiration. This will limit potential losses while offering the opportunity to profit from a decline in shares below $23.
The strategy involves selecting options with a potential profit-to-risk ratio of 1 to 1.88, which is attractive from a capital and risk management perspective.
In conclusion, key factors to monitor will be the price dynamics relative to the $25 level and changes in trading volumes. Any signs of weakening buyer interest could serve as confirmation of the beginning of the correction and a signal to enter a bearish position through put options.